I think Tinks ideas are great :-)

for the most part, kids want your attention - so withdrawing your attention until they have calmed down is perhaps a good way of handling it (i.e. holding their hand and waiting, or turning your back until they calm down, or putting them in bedroom until calm). Assuming they are not endangering themselves, they will eventually calm themselves down.

As long as you catch him when he is hitting and make it quite clear that he needs to stop then you'll define the boundaries. the only other question is maybe to consider that it's not that bad to take away privilages - this is how society works - it is not always positive reinforcement, there are natural consequences for your behaviour - so using natural consequences, and planned ignoring may be strategies that will help.

check out 123 Magic as another parenting resource you may be intrested in as well.